HomeIndiaRupee crosses 81 mark, hits new all-time lowSEXI News

Rupee crosses 81 mark, hits new all-time lowSEXI News

Rupee crosses 81 mark, hits new all-time low

Indian Rupee

New Delhi: The rupee tasted another lifetime low on Friday morning after the US dollar index hit a two-decade high this week on hopes that demand for a safe-haven currency like the dollar would pick up.

This morning, the rupee opened 25 paise lower from the previous session, touching a record low of 81.09 against the US dollar against Thursday’s close of 80.86. Yesterday’s depreciation was the biggest one-day fall for the rupee since February 24.

The US Federal Reserve had hiked the repo rate by 75 basis points – the third consecutive hike of the same magnitude in line with expectations, which essentially means investors will turn to US markets for better and stable returns amid monetary policy . constrict

The Fed also indicated that more rate hikes are coming and that these rates will remain high until 2024. The US central bank wants to achieve maximum employment and inflation at 2 percent over the long term and anticipates that the target range would be appropriate in the ongoing growth.

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Raising interest rates is a monetary policy instrument that generally helps to suppress demand in the economy, thereby helping to lower the inflation rate. Consumer inflation in the US, however, declined marginally to 8.3 per cent in August from 8.5 per cent in July, but is well above the target of 2 per cent.

Santosh Meena, Head of Research, Swastika Investmart said that it is clear from the recent action of US Federal Reserve and remarks that it is still far from the end of the rate hike cycle, he believes that the rupee is expected to remain under pressure. Is. Despite improving domestic economic prospects.

Meanwhile, India’s foreign exchange reserves are at a two-year low. With reserves depleting by nearly USD 80 billion since Russia-Ukraine tensions escalated earlier this year, India’s forex reserves have been on a steady decline over the past few months, fueled by the depreciation of the rupee. This is due to the possible intervention of RBI in the market for defense. ,

Usually, to prevent a sharp fall in the rupee, the RBI intervenes in the market through liquidity management, including selling the dollar. A depreciating rupee usually makes imported goods costlier.

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“The dollar index may continue with its positive bias as the US Fed has decided to raise interest rates by 75 bps for the third month in a row and has indicated that it will continue to raise rates this year at the fastest pace to tackle inflation.” , which is going hot,” said ICICI Securities.

Rupee Breaks 81 Mark for a New Lifetime Low The post first appeared on Indiahead News.

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